System And Method To Simulate The Impact Of Leadership Activity

ABSTRACT

A system and method to simulate the impact of leadership activity for individuals in leader and/or manager roles to be able to model their organization as a system and to simulate a plurality of actions that might be taken and their impact on the non-linear dynamics of the organization, its functions, capabilities, processes and outcomes. The system includes an Organization State component, a Leadership Activities component, an Environment State component, and a Simulation Module component. The Simulation Module component takes in initial conditions defined for the Organization State, Leadership Activities and the Environment State, iterates the functions and process of the organization through time, simulates the interactions of the various variables described in the Organization State, the Leadership Activities and the Environment State and the interactive effects among them and provides outputs of a plurality of measures for each time step.

CROSS-REFERENCE TO RELATED APPLICATIONS

The present application is a continuation of U.S. patent applicationSer. No. 15/341,902, filed on Nov. 2, 2016, which is a continuation ofU.S. patent application Ser. No. 14/109,199, filed on Dec. 17, 2013, nowabandoned, which is a continuation of U.S. patent application Ser. No.11/570,136, filed on Dec. 7, 2006, now U.S. Pat. No. 8,612,270, which isthe § 371 National Phase filing of PCT/US2005/019921, filed Jun. 8,2005, which claims priority to U.S. Provisional Application No.60/578,999, filed Jun. 12, 2004, all of which are incorporated herein byreference in their entireties.

FIELD OF THE INVENTION

This present invention relates to a computer-implemented leadershipsimulation system and method, and in particular, to a system and methodfor simulating the impact of leadership activity for individuals inleader and/or manager roles to model their organization as a system andsimulate a plurality of actions that might be taken, and their impact onthe non-linear dynamics of the organization, and its functions,capabilities, processes and outcomes.

BACKGROUND OF THE INVENTION

Leadership simulations have been in use for years. Typically, leadershipsimulations are comprised of (1) books or periodicals which analyzeorganizational issues and offer advice regarding leadership andmanagement interventions and likely outcomes, (2) generic computermodeling tools (such as spreadsheets), (3) graphical representationtools, (4) optimization analytics and system dynamic models to be usedto model specific problems identified and codified by the user, (5)decision support tools which can be used to quantify the economic impactof various alternative approaches, (6) simulations of fictitious orcomposite firms used to offer virtual experiences similar to experienceslikely to occur in actual organizations, and (7) role playingenvironments in which humans interact with each other and theenvironment in controlled situations, whether real, artificial orimagined, for the purpose of gaining leadership experience and learningleadership skills.

A problem with conventional leadership simulations is that they do notsimulate the underlying non-linear dynamics of organizations in a waythat exposes the realistic impact leadership, or management activitypatterns and behaviors might have on short term performance and longterm sustainability. Another problem with conventional leadershipsimulations is that they focus on the behaviors an individual mightexercise as a leader of people, and not on the impacts the individualhas on organizational processes and dynamics. Another problem withconventional leadership simulations is that they focus on individualdecisions or problems to be solved, when the nature of organizations isthat many actions and decisions are interconnected. This leads to whatis called the ‘law of unintended consequences’: in an organizationalcontext any action triggers many other events, many of which areunforeseen. In addition, dynamic systems such as organizations settlearound attractor states and operate within an attractor basin of acomplex system. Because of this, individual acts or decisions are smallperturbations to the system which, in order to maintain operation in astate of dynamic equilibrium or stability, are dampened by theorganizations balancing feedback loops. This implies that singledecisions, if enacted in isolation, trigger counteracting actions whichserve to dampen the initial effect. This organization leveling effecthas been referred to as “policy resistance” because it is often observedempirically as countermeasures which serve to dampen the effects ofpolicy intervention (See, Sterman, J. D. (2000), Business Dynamics:Systems thinking and modeling for a complex world, McGraw-Hill). Anotherproblem with the above-referenced approaches is that they are limited tohuman-run organizations (e.g., for-profit and non-profit corporations,partnerships, etc.), and do not contemplate non-human organizations(such as computer systems), and leadership of computerized agents.

While the above-referenced solutions may be suitable for the particularpurpose to which they address, they are not as suitable for individualsin leader and/or manager roles to be able to model their organization asa system and to simulate a plurality of actions that might be taken andtheir impact on the non-linear dynamics of the organization, itsfunctions, capabilities, processes and outcomes. Additionally, the abovesolutions cannot be used to dynamically control complex computerizedenvironments, where autonomous computerized agents must be organized andled.

Thus, there is presently a need for a system and method which enablesindividuals (or computerized agents) in leader and/or manager roles tobe able to model their organization as a system and to simulate aplurality of actions that might be taken and their impact on thenon-linear dynamics of the organization, its functions, capabilities,processes and outcomes.

SUMMARY OF THE INVENTION

An exemplary embodiment of the present invention comprises a method forimplementing a leadership simulation including the steps of gatheringdata on at least one organization state variable, gathering data on atleast one leadership activities variable, and calculating theperformance of an organization based on the organization state andleadership activities variables.

Another exemplary embodiment of the present invention comprises acomputer system including at least one server computer; and, at leastone user computer coupled to the at least one server through a network,wherein the at least one server computer includes at least one programstored therein, said program performing the steps of accepting data onat least one organization state variable, accepting data on at least oneleadership activities variable and, calculating the performance of anorganization based on the organization state and leadership activitiesvariables.

Another exemplary embodiment of the present invention comprises acomputer readable medium having embodied thereon a computer program forprocessing by a machine, the computer program including a first codesegment for accepting data on at least one organization state variable,a second code segment for accepting data on at least one leadershipactivities variable, and a third code segment for calculating theperformance of an organization based on the organization state andleadership activities variables.

Another exemplary embodiment of the present invention comprises acomputer data signal embodied in a carrier wave including a first codesegment for accepting data on at least one organization state variable,a second code segment for accepting data on at least one leadershipactivities variable, and a third code segment for calculating theperformance of an organization based on the organization state andleadership activities variables.

Another exemplary embodiment of the present invention comprises a methodfor implementing a leadership simulation including the steps ofgenerating at least one organization state variable, generating at leastone leadership activities variable, and calculating the performance ofan organization based on the organization state, environment state, andleadership activities variables.

BRIEF DESCRIPTION OF THE DRAWINGS

FIG. 1 is a block diagram showing the main components of a systemaccording to an exemplary embodiment of the present invention.

FIG. 2 is diagram showing some components and variables of a systemaccording to an exemplary embodiment of the present invention.

FIG. 3 is a block diagram showing a computer system according to anexemplary embodiment of the present invention.

FIG. 4 is a flow chart showing a method for implementing a leadershipsimulation according to an exemplary embodiment of the presentinvention.

FIG. 5 is a flow chart showing additional steps in a method forimplementing a leadership simulation according to an exemplaryembodiment of the present invention.

FIG. 6 is a flow chart showing additional steps in a method forimplementing a leadership simulation according to an exemplaryembodiment of the present invention.

FIG. 7 is a flow chart showing additional steps in a method forimplementing a leadership simulation according to an exemplaryembodiment of the present invention.

FIG. 8 is a flow chart showing additional steps in a method forimplementing a leadership simulation according to an exemplaryembodiment of the present invention.

FIG. 9 is a flow chart showing additional steps in a method forimplementing a leadership simulation according to an exemplaryembodiment of the present invention.

DETAILED DESCRIPTION

The present invention comprises, in one exemplary embodiment, acomputer-implemented system and method to simulate the impact ofleadership activity in an organization.

In view of the foregoing disadvantages inherent in existing leadershipsimulations, the present invention provides a new system and method tosimulate the impact of leadership activity which can be utilized forindividuals in leader and/or manager roles to be able to model theirorganization as a system and to simulate a plurality of actions thatmight be taken and their impact on the non-linear dynamics of theorganization, its functions, capabilities, processes and outcomes.

The general purpose of the present invention, which will be describedsubsequently in greater detail, is to provide a new system and method tosimulate the impact of leadership activity that has many of theadvantages of the leadership simulations mentioned heretofore, and manynovel features that result in a new system and method to simulate theimpact of leadership activity.

The present invention generally comprises: (1) an input system ofvariables that define an organization's state, (2) an input system ofvariables that define leadership activities, (3) an input system ofvariables that define the environment's state, (4) a simulation module(which can be based upon any number of methods, such as for example,equation-based, discrete event, social network or agent-based modeling)(5) output reports, and (6) analysis and recommendations.

FIG. 1 is a flow diagram showing the above-referenced elements of asystem 100 according to an exemplary embodiment of the presentinvention, and their interconnection. The Organization State component101 comprises a plurality of variables that reflect the states ofvarious aspects of an organization (e.g., business corporation,non-profit, political or religious group) including but not limited toresources and capabilities. These variables define, among other things,economic rents called for generality performance rents, organizationalslack, information flows, influence flows, resource flows, currentcapabilities and their exploitation, and the exploration for anddevelopment of new capabilities. Included are the ability to inputinitial conditions, the research instruments, systems and methods usedto gather relevant data for input, and functions for these variables,and the analysis and reporting database and platform to provide accessto information for analysis and benchmarking.

The Leadership Activities component 102 represents a plurality offactors described in leadership and management literature that are seento have impact on the organization as a whole. These activities includetransactional leadership activities, such as objective setting, rewardfor performance programs, supervision, training programs, personnelevaluation, hiring and firing, quality programs, budget review,performance management and other actions intended to improve efficiencyand effectiveness. Also included are transformational leadershipactivities, such as strategy reviews and development, visioningsessions, communication programs, town hall meetings, skip levelmeetings, “all hands” meetings, customer focus programs, future focus,motivational speaking, cross-functional teams, initiatives and skunkworks, brainstorming and action learning programs, symbols andactivities intended to motivate, define future direction, align action,inspire confidence and increase intellectual stimulation. Also includedare variables describing where inside the organization these activitiesoccur, and the systems and methods for instrumenting the organization tocollect data about how the organization's members are perceiving andresponding to these actions. Included are the ability to input initialconditions, systems and methods, the research instruments used to gatherrelevant data for input, functions for these variables, and the abilityto alter assumed leadership activity patterns to test alternateoutcomes.

The Environment State component 103 consists of a plurality of variablesthat reflect the states of various aspects of the environment throughtime, including forecasts, expected variance, and probabilities. Theseinclude both old and new market size and growth, the affects oforganizational actions on these markets, competitors, and otherenvironmental factors, competition in both old and new markets and theimplications of disruptive technologies to both old and new markets.Included are the ability to input initial conditions, the researchinstruments, systems and methods used to gather relevant data for input,and functions for these variables.

The Simulation Module component 105 takes in initial conditions andforecasts defined for the Organization State component 101, theLeadership Activities component 102, and the Environment State component103, and iterates the functions and processes of the organizationthrough time (either deterministically using mathematical equations,stochastically, or through some other method, such as agent-basedmodeling, discrete event simulation, game theory, or social networkanalysis), simulates the interactions of the various variables describedin the Organization State, the Leadership Activities and the EnvironmentState and the interactive effects among them, and provides outputs of aplurality of measures for each time step, and stores these outputs in adatabase.

The Output Reports component 106 provides a plurality of data about theOrganization State component 101, Leadership Activity component 102 andthe Environment State component 103 over time. These reports may be inthe form of graphs, tables, data files, animations, videos, graphical oraudio outputs that might for example resemble video games, or machinereadable output files, for the purpose of either implementing protocolsfor agent action, or for further analysis and manipulation.

The Analysis and Recommendations component 107 reviews the input andoutput data, and compares the data to prior simulations and availableempirical data to make recommendations or implement methods or storedprotocols regarding the implications of various leadership activities onorganizational variables and outcomes.

There has thus been outlined some important features of a system 100according to an exemplary embodiment of the present invention. There areadditional features of the exemplary embodiment that will be describedhereinafter.

An object of the present invention is to provide a system and method tosimulate the impact of leadership activity that will overcome theshortcomings of the prior art devices. Another object of the presentinvention is to provide a system and method to simulate the impact ofleadership activity for individuals in leader and/or manager roles to beable to model their organization as a system so as to provideinstrumentation that provides a detailed description of theorganization's state over time, and to simulate a plurality of actionsthat might be taken and their impact on the non-linear dynamics of theorganization, its functions, capabilities, processes and outcomes.Another object is to provide a system and method to simulate the impactof leadership activity that provides data to individuals (whetherleaders, managers, consultants, administrators and/or policy makers)about the potential consequences for an organization of individualaction or actions. For these purposes, an organization can be anaggregate of two or more individuals. Another object is to provide asystem and method to simulate the impact of leadership activity that canbe used to model the dynamic behavior of an organization under variousconditions. This provides a means of verifying and improving theparameters used in the model and enables continued improvement ofperformance over time. This would include the impact of variousenvironmental conditions on the performance of the organization both ina given period and over time. Another object is to provide a system andmethod to simulate the impact of leadership activity that can be used tomodel the impact of various leadership or management factors thatcharacterize the organization, and their impact on the organization, forexample but without limitation, on period performance (such as sales,profits, cash flow, Economic Value Added (EVA), and shareholder value)and sustainability (such as revenue and cash flow growth andadaptability) over time. Another object is to provide a system andmethod to simulate the impact of leadership activity that can be used tomodel the impact of the level of interdependence in the organization onthe organization's tasks and task assignments, resources and resourceallocation, knowledge and knowledge diffusion, and people or otherautonomous actors (as well as the actors roles, influences, visibilityto knowledge among other actors, and their interactions). Another objectis to provide a system and method to simulate the impact of leadershipactivity that can be used to model the impact of the focus on potentialversus historical performance of the organization and thus provide thosein leadership roles with a simulation environment that acts as a “flightsimulator” to help leaders navigate the organizational transformation orchange process. Another object is to provide a system and method tosimulate the impact of leadership activity that can be used to model theimpact of the relative investment in exploration versus exploitationover time and under different and varying environmental conditions overtime and thus support an organization's resource allocation decisionprocess, strategic planning, leadership development and trainingprograms, assessment and staffing, and succession planning.

As discussed above, the Organization State component 101 comprises aplurality of variables describing the simulated organization, that couldbe, but are not limited to, representing a real world organization atcertain points in time, together with the relationships among thesevariables over time, which define some aspect of the organization'sfunctioning and performance at a given point in time. As time passes,some but not necessarily all of the plurality of variables change andsome but not necessarily all of a plurality of relationships change.This collection of variables and their values; the research instrumentsused when a real world organization is being simulated, such as surveys,interview protocols, calendar and use-of-time analysis, and observationand coding techniques to collect data; the relationships among them; andhow they change through time; comprise the Organization State over time.Another object is to provide instrumentation, monitoring capability, andvisibility into the organization's complex and dynamic inner workingsover time.

The Organization State component 101 might vary in representationdepending upon the organization's objectives, membership and outcomes.Objectives might vary as related to commercial profits, knowledgedevelopment or educational performance, political influence, militarypower, governmental agency or prison system, community service,religious or secular belief or the maximizing some other goods orservices that are valued by the organization's members. Theorganizations membership might vary as related to commercialrelationships, such as employment, contracted association or valuesharing partnerships, teacher/learner relationships common in knowledgedevelopment, research or educational performance, politicalrelationships such as political parties or interest groups, conscriptionor other government mandated relationship, such as in the military,community relationships, religious or secular belief systems or the selfinterest of individuals intent on maximizing some other goods orservices that are valued by the organization's members. Outcomes mightvary as related to commercial profits, knowledge acquired or developed,political influence achieved, military conquest or protection,governmental agency or prison system mandated outcomes, communityservice objectives, religious or secular belief objectives or themaximizing some other goods or services that are valued by theorganization's members.

The Leadership Activities component 102 comprises a plurality ofvariables describing the leadership activity throughout the organizationat certain points in time, together with the relationships among thesevariables over time, which define the system biasing or controlexercised by leadership actions of some aspect, or all, of theorganization's functioning and performance at a given point in time. Astime passes, some but not necessarily all of the plurality of variableschange and some but not necessarily all of a plurality of relationshipschange. This collection of variables, the survey, interview, use-of-timeanalysis, and research instruments used to collect and code data, therelationships among them and how they change through time comprise theLeadership Activities over time.

The Leadership Activities component 102 might vary in representationdepending upon the organization's objectives, membership and outcomes.Objectives might vary as related to commercial profits, knowledgedevelopment or educational performance, political influence, militarypower, governmental agency or prison system, community service,religious or secular belief or the maximizing some other goods orservices that are valued by the organization's members. Theorganization's membership might vary as related to commercialrelationships, such as employment, contracted association or valuesharing partnerships, teacher/learner relationships common in knowledgedevelopment, research or educational performance, politicalrelationships such as political parties or interest groups, conscriptionor other government mandated relationship, such as in the military,community relationships, religious or secular belief systems, or theself interest of individuals intent on maximizing some other goods orservice that is valued by the organization's members. Outcomes mightvary as related to commercial profits, knowledge acquired or developed,political influence achieved, military conquest or protection,governmental agency or prison system mandated outcomes, communityservice objectives, religious or secular belief objectives or themaximizing some other goods or services that are valued by theorganization's members. Changes to the above might vary the LeadershipActivities represented with respect to, for example, but not limited to,varying degrees among directive behaviors or participative decisionmaking, top-down versus bottom-up aspiration development activities,consensus achievement activities, situational decision making andaspiration development, and revelatory decision making and aspirationdevelopment.

The Environment State 103 comprises a plurality of variables describingthe environment of the organization at certain points in time, togetherwith the relationships among these variables over time, which definesome aspect of the organization's functioning and performance potentialat a given point in time. As time passes, some but not necessarily allof the plurality of variables change and some but not necessarily all ofa plurality of relationships change. This collection of variables, thesurvey, interview and research instruments used to collect data, therelationships among them and how they change through time is defined asthe Environment State over time.

The Environment State component 103 might vary in representationdepending upon the organization's objectives, membership and outcomes.Objectives might vary as related to commercial profits, knowledgedevelopment or educational performance, political influence, militarypower, governmental agency or prison system, community service,religious or secular belief, or the maximizing some other goods orservices that are valued by the organization's members. Theorganizations membership might vary as related to commercialrelationships, such as employment, contracted association or valuesharing partnerships, teacher/learner relationships common in knowledgedevelopment, research or educational performance, politicalrelationships such as political parties or interest groups, conscriptionor other government mandated relationship, such as in the military,community relationships, religious or secular belief systems, or theself interest of individuals intent on maximizing some other goods orservices that are valued by the organization's members. Outcomes mightvary as related to commercial profits, knowledge acquired or developed,political influence achieved, military conquest or protection,governmental agency or prison system mandated outcomes, communityservice objectives, religious or secular belief objectives or themaximizing some other goods or services that are valued by theorganization's members. The Environment State would thus be representedin terms related to objective, membership and outcomes.

The Simulation Module component 105 preferably comprises a softwareprogram written for a digital computer that, based upon input from aplurality of variables describing the Organization State component 101,Leadership Activities component 102 and the Environmental Statecomponent 103 at certain points in time, together with the relationshipsamong these variables over time that defines some aspects of theorganization's functioning and performance at a point in time,determines the Organization State, Leadership Activities, andEnvironment State and each subsequent point in time. As time passes,some but not necessarily all of the plurality of variables change andsome but not necessarily all of a plurality of relationships change.This collection of variables, relationships and how they change throughtime is stored in the Simulation Module as a data set for use by theOutput Reports component of the system. Thus, experiments can beperformed by the Simulation Module, and the data collected can be usedfor results analysis. For example, the Simulation Module may generateoutputs (based on the input variables) such as ‘total revenue generatedby the organization over a specific time period,’ referred to below asTotal Performance Rents Collected (TPRC). Another output which may begenerated from the input variables by the Simulation Module is ‘cashflow over a specific time period,’ referred to below as ResourcesAvailable to the Firm (RAF). Analysis of theses types of outputs willassist the organization in determining which input variables provide themost beneficial results (i.e., most revenue, best cash flow position,etc.) to the organization.

FIG. 2 is an example of some state variables and their relationships.For example, variables within the Leadership Activities component 102,such as Transformational Leadership Activity (TrLA) 150 andTransactional Leadership Activity (TLA) 151 are shown in FIG. 2. Alsoshown are variables from the Organization State Component 101, such asSlack Resources (SRes) 160, Current Capabilities for Exploitation (CCE)161, and New Capabilities from Exploration (NCEx) 162. New MarketCarrying Capacity (NMCC) 170 and Old Market Carrying Capacity (OMCC) 171are variables from the Environment State component 103 also representedin FIG. 2. These variables and the interactions between them will beexplained in detail below.

The Simulation Module component 105 may be software or hardware based,or may comprise actions carried out by human beings, or a combinationthereof. The Simulation Module component 105 may be represented asmathematical equations or models; and it may utilize various softwareapproaches such as Rules Based Systems, Expert Systems, LinearProgramming, Various Optimization techniques, agent-based modeling,multi-agent modeling, cellular automata, network analysis, systemdynamics modeling. It may also be continuous or discrete; and it mayinclude the modeling of a single organization, multiple organizations ora component or components of a single organization.

The Output Reports component 106 preferably comprises a software programwritten for a digital computer that, based upon the data set created bythe Simulation Module component 105, displays the data in a variety ofways, both standard and custom, for the purposes of analysis. The OutputReports display data related to a plurality of variables describing theOrganization State, Leadership Activities and the Environmental State ateach point in time, together with the relationships among thesevariables over time that defines some aspects of the organization'sfunctioning and performance at each point in time and in summary form asdefined by the user. Thus results of experiments can be analyzed andconclusions inferred for the results Analysis and Recommendationscomponent 107.

The Output Reports may take the form of 1, 2 or 3 dimension graphs orgraphics, higher dimension graphs or graphics projected in 1, 2 or 3dimensions, tables, arrays, data files, auditory signals, light pulses,time dependent displays such as videos, or computer simulations thatresemble, but are not limited to, video games.

The Analysis and Recommendations component 107 is a collection oftechniques used to analyze the Output Reports, and that, based upon thedata set created by the Simulation Module and the values of thevariables from the Organization State, Leadership Activities andEnvironment State, determines in a variety of ways, interventions thatmight be effectively implemented in the subject organization. TheAnalysis and Recommendations component 107 can also select from amongestablished leadership activity protocols in a knowledge-base andimplement them, as for example, in an organization of computerizedactors or as a training program or action plan intended to guide thebehaviors of human actors. The Analysis and Recommendations componentpredicts real-world outcomes which can be expected to be measured in thesubject organization using the same data gathering techniques, that is,the survey, interview, system database queries and reports, and researchinstruments used to collect input data for the Organization State,Leadership Activities and Environmental State components. The Analysisand Recommendation component, together with data gathered from theorganization through the survey, interview, system database queries andreports, and research instruments used to collect data, can also be usedmodify, through progressive iterations of comparison and modification,the relationships embodied in the Simulation Module. Thus, results ofexperiments can be analyzed and conclusions inferred to continuouslyimprove the Simulation Module's predictive power with respect to theorganization it is intended to simulate, whether real or artificial. Thetechniques employed include variations of mathematical and iterativeanalysis with real world measurements of the subject organization,scenario analysis, stochastic analysis, Monte Carlo analysis,agent-based modeling, network analysis, system dynamics, game theory,various optimization and convergence techniques.

As is shown in FIG. 1, the Organization State 101 is connected to theLeadership Activities 102 in that the state of Leadership Activityvariables impact changes to Organization State variables and vice versa.Leadership Activities 102 are connected to the Environmental State 103in that the Environment State variables impact changes to LeadershipActivity variables. The Organization State 101 is connected to theEnvironment State 103 in that the Environment State variables impactchanges to Organization State variables.

The Simulation Module 105 is connected to the Organization State 101 inthat the Simulation Module uses Organization State variables as inputsto its processing and then it outputs new values for Organization Statevariables at each time step. The Simulation Module 105 is connected tothe Leadership Activities 102 in that the Simulation Module usesLeadership Activity variables as inputs to its processing and then itoutputs new values for leadership Activity variables at each time step.The Simulation Module 105 is connected to the Environment State 103 inthat the Simulation Module uses Environment State variables as inputs toits processing and then it outputs new values for Environment Statevariables at each time step.

The Simulation Module 105 is also connected to the Output Reports 106 inthat the output of the Simulation Module is the input for OutputReports. The Output Reports 106 are connected with Analysis andRecommendations 107 in that Output Reports are inputs to Analysis andRecommendations. Analysis and Recommendations 107 are connected to theSimulation Module 105 in that Analysis and Recommendations may lead tochanges in the Simulation Modules. If multiple organizations aresimulated, the Organization State variables and Leadership Activityvariables for each organization are connected to one another in that thevalues of each become inputs to the other.

The Organization State component 101 includes a series of variables thatare used to define the state of the organization at each point in timeand over time together with the research instruments, systems andmethods used to collect the values of said variables. Variablesaccording to an exemplary embodiment of the present invention arediscussed below.

Using research instruments such as survey instruments, whether bytelephone, Internet, or face-to face; interview protocols, whether bytelephone, Internet, or face-to face; observation and coding techniques,whether by telephone, Internet, or face-to face as well as eithersoftware assisted or manually performed; Internet search engines orother data mining techniques; electronic surveillance techniques whetherof electronic communication, computer, Internet or network usage or ofphysical environments through video or audio equipment, or forecastsand/or assumptions, initial values for the variables are established andvalues for these variables over time may be predicted.

In the exemplary implementation described below, the researchinstruments used were data mining from published case studies andassumptions made by the researcher. Any of the other techniques, as wellas others included in the context of this invention but not listed,could also have been used in the exemplary implementation described.Variables include, but are not limited to: Total Performance RentCollected (TPRC) which is the total value of the tangible and intangiblegoods or services, as represented either in dollars or other metric,that is returned to the organization from the environment as theorganization executes all of its capabilities in the aggregate. In theexemplary embodiment, TPRC is measured in U.S. dollars. Tax Rates,Investor Returns, and Other Fees are variables measuring theorganization's external costs which limit the application of TPRC tointernal organizational uses. In the exemplary embodiment, Tax Rates,Investor Returns, and Other Fees are measured in a percent of U.S.dollars.

Return Rate (RR) is a variable that describes the rate at which TPRC isreturned to the organization for internal use. In the exemplaryembodiment, RR is measured as a percent of U.S. dollars. ResourcesAvailable to the Firm (RAF) is a variable that describes the TPRCreturned to the organization for internal use. In the exemplaryembodiment, it is measured is U.S. dollars. Required for Operations(RFO) is a variable that describes the rate at which RAF are consumed bythe organization for internal use using the most efficient meanspossible, given the level of Current Capabilities for Exploitation(CCE). CCE may comprise such things as physical, intangible or financialassets, Property Plant and Equipment (PP&E), current assets andliabilities, production capabilities, industry or company knowledge,process knowledge, policies, procedures, routines, training programs,and human capital and people such as, but not limited to, skilled andunskilled workers, managers and professionals whether employees,contractors or contracted for services such as outsourced services andthe interconnections and interdependences among all of the above. In theexemplary embodiment, RFO is measured as a percent of U.S. dollars. NestFeathering (NF), which measures the rate resources that could be Slack(SRes) are instead absorbed slack resources by the firm, describes therate at which RAF are consumed by the organization for internal use thatis in excess of the most efficient means possible given the level ofCCE. This is a measure of, for example, but not limited to, managementperquisites, excess compensation, organizational inefficiencies,unauthorized projects or skunk works, sub-optimal supplier contracts,under-utilized or under-trained employees or contractors, and unresolvedindividual/organization agency conflicts consuming organizationalresources. In the exemplary embodiment, NF is measured as a percent ofU.S. dollars.

Slack Resources (SRes) is a variable that describes the RAF that arereturned to the organization for discretionary internal use. In theexemplary embodiment, SRes is measured in U.S. dollars. Slack Rate (SRa)is a variable that describes the rate at which RAF are converted to SResand are thus retained by the organization for discretionary projects, orare available for excess compensation to certain subsets of stakeholders(e.g., senior management, shareholders, etc. in one-time payouts orstock repurchase programs). In the exemplary embodiment, SRa is measuredas a percent of U.S. dollars. Exploitation Allocation Rate (EAR) is avariable that describes the rate at which SRes are allocated by theorganization for discretionary projects to improve the exploitation ofcurrent capabilities. These would include but not be limited to qualityprograms, process technology investment, training, and incrementalcapacity development. In the exemplary embodiment, EAR is measured as apercent of U.S. dollars. Exploitation Resources (ER) is a variable thatdescribes the accumulated level of resources allocated by theorganization for discretionary projects to improve the exploitation ofcurrent capabilities. These would include, but not be limited to,resources targeted for investment in quality programs, processtechnology investment, increased inventory (or other current assets),training and hiring programs or other activities that increase humancapital, investment in property plant and equipment (PP&E) orinformation technology (IT) infrastructure, leadership developmentprograms and succession planning efforts that improve executivemanagement capabilities, and incremental capacity development. In theexemplary embodiment, ER is measured in U.S. dollars.

Exploitation Capabilities Creation Rate (ECCR) is a variable thatdescribes the rate at which CCE are developed from ER. ECCR representsthe activities and conversion efficiency (and associated time delay) ofresources into capabilities. This variable represents the process ofcapability development and includes but is not limited to the complexprocess of analysis, decision, execution, work rules, knowledgemanagement, coordination, supervision, hiring & firing, training andproject management. In the exemplary embodiment, ECCR is measured as apercent of U.S. dollars. Current Capabilities Exploitation (CCE)represents the potential of the organization to extract TPRC from theenvironment for each capability. Examples of incremental increases incapabilities might include: efficiency improvements due to technology orbusiness model enhancements, capacity additions or increasedproductivity, and improved modes of communication or connection (asmight be the case in certain political or religious organizations) suchas without limitation, personnel programs, hiring and on-boardingpolicies, performance management programs, knowledge management, etc. Inthe exemplary embodiment, CCE is measured in U.S. dollars. ExploitationCapabilities Dissipation Rate (ECDR) is a variable that describes therate at which CCE decline assuming no incremental maintenance investmentis made and includes obsolescence associated with changing environmentalrequirements and technology. For example, depreciation is an approximatemetric. In the exemplary embodiment, ECDR is measured as a percent ofU.S. dollars. Rent From Current Capabilities Exploitation (RFCCE) is avariable that describes the portion of TPRC that is gathered from theenvironment due to the CCE resident in the organization. It representsthe actual extraction of TPRC from the environment for each individualcapability in the organization, and in the aggregate. In the exemplaryembodiment, RFCCE is measured in U.S. dollars. Performance ReportingDelay (PRD) measures the time delay between events and the availabilityof information about the events for use within the organization.

Exploration Allocation Rate (ExAR) is the variable that describes therate at which Slack Resources (SRes) are allocated by the organizationfor discretionary projects to explore for opportunities and new ways ofdoing things, and develop new capabilities. These would include, but notbe limited to, resources targeted for investment in outside boardmemberships and professional associations, Research & Development (R&D)programs, conferences, trade shows, executive education, generaleducation programs, strategic alliances, joint ventures andpartnerships, new technology investment and new ventures and crossfunctional initiatives, and other activities intended to increase anorganization's absorptive capacity, and its ability to understand andrespond to the environment. In the exemplary embodiment, ExAR ismeasured as a percent of U.S. dollars. Exploration Resources (ExR) is avariable that describes accumulated level of resources allocated by theorganization for discretionary projects to explore and develop newcapabilities. These would include, but not be limited to, resourcestargeted for investment in R&D programs, new technology investment, newproducts and programs, new ventures and cross functional initiatives,merger and acquisition (M&A) activities, joint ventures, and strategicpartnerships. In the exemplary embodiment, ExR is measured in U.S.dollars.

Exploration Capabilities Creation Rate (ExCCR) is a variable thatdescribes the rate at which New Capabilities from Exploration (NCEx) aredeveloped from ExR. It represents the activities and conversionefficiency of resources to capabilities (and the associated time delay).This variable represents the process of capability development andincludes but is not limited to the complex process of analysis,decision, execution, work rules, knowledge management, coordination,supervision, hiring & firing, training and project management. In theexemplary embodiment, ExCCR is measured as a percent of U.S. dollars.NCEx is the variable that represents the potential of the organizationto extract TPRC from the environment for each new capability. Newcapabilities might include the capacity to offer new products andservices, address new market or other environmental needs, or gain newareas of political or religious influence. As such, NCEx may comprisesuch things as physical, intangible or financial assets, Property Plantand Equipment (PP&E), current assets and liabilities, productioncapabilities, industry or company knowledge, process knowledge,policies, procedures, routines, training programs, and human capital andpeople such as, but not limited to, skilled and unskilled workers,managers and professionals whether employees, contractors or contractedfor serves such as outsourced services and the interconnections andinterdependences among all of the above. In the exemplary embodiment,NCEx is measured in U.S. dollars.

Exploration Capabilities Dissipation Rate (ExCDR) is a variable thatdescribes the rate at which NCEx decline assuming no incrementalmaintenance investment is made and includes obsolescence associated withchanging environmental requirements and technology. For example,depreciation is an approximate metric. In the exemplary embodiment,ExCDR is measured as a percent of U.S. dollars. Rent From NewCapabilities from Exploration (RFNCEx) is a variable that describes theTPRC that is gathered from the environment due to the NCEx resident inthe organization. It represents the actual extraction of TPRC from theenvironment for each new capability, and in the aggregate and includesmarket and environmental interactions. In the exemplary embodiment,RFNCEx is measured in U.S. dollars. Explore Reporting Delay (ExRD)measures the time delay between events, and the availability ofinformation about the events for use within the organization.

In sum, the variables for the Organization State component 101 includethe following: TABLE-US-00001 Total Performance Rent Collected TPRC(R.sup.Collected) Return Rate RR (r.sup.Return) Resources Available tothe Firm RAF (R.sup.Available) Required for Operations RFO (r.sup.Ops)Current Capabilities for Exploitation CCE (C.sup.Exploit) NestFeathering NF (r.sup.Absorb) Slack Resources SRes (R.sup.Slack) SlackRate SRa (r.sup.slack) Exploitation Allocation Rate EAR (r.sup.Exploit)Exploitation Resources ER (R.sup.Exploit) Exploitation CapabilitiesCreation Rate ECCR (.alpha..sup.Exploit) Exploitation CapabilitiesDissipation Rate ECDR (.epsilon..sub.Exploit) Rent From CurrentCapabilities for RFCCE (r.sup.exploit) Exploitation PerformanceReporting Delay PRD (.delta..sub.Perform) Exploration Allocation RateExAR (r.sup.Explore) Exploration Resources ExR (R.sup.Explore)Exploration Capabilities Creation Rate ExCCR (.alpha..sub.Explore) NewCapabilities from Exploration NCEx (C.sup.Explore) ExplorationCapabilities Dissipation Rate ExCDR (.epsilon..sub.Explore) Rent FromNew Capabilities for Exploration RFNCEx (r.sup.explore) ExploreReporting Delay ExRD (.delta..sub.Adapt) Time Delay New CapabilityDevelopment TDExCD (.delta..sub.Explore) Time Delay ExploitationCapability TDECD (.delta..sub.Exploit) Development

Another component of the present system 100 is the Leadership Activitiescomponent 102. The Leadership Activities component 102 includes a seriesof variables that are used to define the state of Leadership Activity inthe organization at each point in time, and over time, together with theresearch instruments used to collect the values of said variables.Variables according to an exemplary embodiment of the present inventionare discussed below.

Using research instruments such as observation, survey instruments,whether by telephone, Internet, or face-to face; interview protocols,whether by telephone, internet, or face-to face; observation and codingtechniques, whether by telephone, internet, or face-to face as well aseither software assisted or manually performed; time-reporting orCustomer Resource Management (CRM) systems, communication portals,electronic survey services, or other data collection platforms, Internetsearch engines or other data mining techniques; electronic surveillancetechniques whether of electronic communication, computer, Internet ornetwork usage or of physical environments through video or audioequipment, or assumptions, initial values for the variables areestablished and values for these variables over time may be predicted.

In the exemplary embodiment, the research instruments used were datamining from published case studies and assumptions made by theresearcher. Any of the other techniques, as well as others included inthe context of this invention but not listed, could also have been usedin the exemplary embodiment.

Variables include, but are not limited to: Transactional LeadershipActivity (TLA), a variable that measures the level of activity forvarious types of transactional leadership activity that influencespeople in the organization who in turn influence a given organizationalcapability, all capabilities, and in the aggregate. These would include,but would not be limited to, activities considered to be soundmanagement practice, such as objective setting, reward-for-performanceprograms, control and monitoring, role clarity, task structuring andassignment, load balancing, resource allocation, training, knowledgemanagement, leadership development, communication training and systems,succession planning and programs, project management, supervisorycoaching and training, performance management, hiring, firing andon-boarding, budget reviews, management by exception, decision-making,execution, performance aspiration setting and designing and implementingcompensation programs and human resource policies that promote theabove. In the exemplary embodiment, TLA is measured in activities ofeach type per month throughout the organization and in each work group.Transacting Leadership Creation Rate (TLCR) is a variable that describesthe rate at which TLA increases due to pressure to perform eitherthrough endogenous forces or exogenous ones. In the exemplaryembodiment, TLCR is measured as a percent of TLA per time period.Transacting Leadership Dissipation Rate (TLDR) is a variable thatdescribes the rate at which TLA declines due to organizational fatigue,institutional resistance or the persistence of bureaucratic processesassuming no incremental pressure (i.e., no positive TransactionLeadership Creation Rate). In the exemplary embodiment, TLDR is measuredas a percent of TLA per time period. Exploitation Aspirations (EA) is avariable which measures an organization's members' current understandingof the organization's vision, mission strategy and objectives and theirrole in addressing the organization's performance objectives andaspirations in its current state with its current capabilities. Thesemay or may not be aligned with actual external market carrying capacitydepending on the leadership quality metrics described below. In theexemplary embodiment, EA is measured in U.S. dollars per time period.Actual Performance Versus Aspiration Gap (APvAG) is a variable thatmeasures the organization members' understanding of the actionable,articulated, organizationally understood gap between EA, and measuredPerformance with Reporting Delay (PRD). PRD represents the time delaybetween events in the environment and the organization's membersawareness and interpretation of performance. APvAG represents the levelof understanding by the organization's members of the gap between TA andPRD and their level of engagement and commitment to the organization toclose the gap (e.g., APvAG). APvAG applies pressure to perform, whichunder the right conditions may create increased TLCR and thus TLA. Inaddition, external Pressure to Perform (PTP) is the variable thatmeasures the organization's members' perceived need to perform due toexternal pressure and this may also have a positive influence on TLCRand thus TLA.

Transformational Leadership Activity (TrLA) is a variable that measuresthe level of activity for various types of transformational leadershipactivity that influences people in the organization who in turninfluence a given organizational capability, all capabilities, and inthe aggregate. These would include activities often described as changemanagement, and well as transformational, charismatic and strategicleadership such as developing a shared vision, defining the nature andposition of the organization's boundary in the context of identity andtransactions, resources and moral and ethical principles, instilling anenterprise perspective with portfolio management disciplines, focusingthe organization on opportunities, leading in decision-making andcommunicating, providing individualized consideration, offeringintellectual stimulation and excitement, building credibility andintegrity through policies but also through role modeling, enablingaction by breaking down barriers and boundaries, challenging existingprocesses, being a role model, encouraging teamwork and teamself-governance and self-regulation, managing across team boundaries,building team learning and decision making skills, creating andintegrating future state aspirations across many teams and work groups,bringing focus to the most promising ideas, providing consistentdecision making context, aligning people with their passions, integratemarket and environment feedback into decision making, demandcollaboration, creating dissatisfaction with the current state ofsituation, setting future vision and pathways, goal alignment, townmeetings, skip level meetings, cross functional initiatives, R&Dresource allocation processes, skunk works and venturing sponsorship,strategy reviews, future state aspiration setting and designing andimplementing compensation programs and human resource policies topromote the above. In the exemplary embodiment, TrLA is measured inactivities of each type per month. Transformational Leadership CreationRate (TrLCR) is a variable that describes the rate at which TrLAincreases due to pressure to change which develops either endogenouslyor exogenously. In the exemplary embodiment, TrLCR is measured as apercent of TrLA per time period. Transformational Leadership DissipationRate (TrLDR) is a variable that describes the rate at which TrLAdeclines due to organizational fatigue, institutional resistance orbureaucratic persistence assuming no incremental pressure to change(i.e., no positive Transformational Leadership Creation Rate). In theexemplary embodiment, TrLDR is measured as a percent of TrLA per timeperiod. Transforming Aspirations (TA) is a variable which measures anorganization's members' understanding of the organization's vision,mission and strategy for the future and their role in forming andachieving the vision of it's future state, and it's aspirations relatedto identifying new opportunities in the environment, developing newcapabilities and gathering performance rents from these newopportunities such as markets. These TA may or may not be aligned withactual external market carrying capacity depending on the leadershipquality metrics described below. In the exemplary embodiment, TA ismeasured in U.S. dollars per time period.

Current State Versus Desired State Gap (CSvDSG) is the variable thatmeasures the organization's members' understanding of the actionable,clearly-articulated, organizationally understood gaps between theorganization's desired state as defined by TA, and its current state asindicated information represented by the variable Explore Rents withReporting Delay (ERRD). ERRD takes into account the delay andinterpretation involved in identifying events and reporting theirresults for purposes of decision and action. This variable appliespressure to change which, under the right conditions, may createincrease TrLCR and thus TrLA. External Pressure to Change (PTC) is thevariable that indicates the organization's members' perceived need forchange based upon exogenous factors.

Leadership activities impact the Organization State and it's variableson an iterative basis in a number of ways. TLA exerts TransactionLeadership Efficiency Pressure (TLEP), so as to reduce the rate of NestFeathering (NF), and thus increase the Slack Rate (SR). TLA alsoinfluences a function called Investment in Exploitation (IIE) whichinfluences the Exploitation Allocation Rate (EAR). TrLA impacts thefunction Investment in Exploration (IIEx) which influences theExploration Allocation Rate (ExAR), and through a different function,Investment in Initiatives (III), TrLA also influences ExAR as specificopportunities for the creation of new capabilities are identified andinitiatives are organized. TLA and TrLa are balanced in their influenceson EAR and ExAR through the additional leadership influence functionBalance Exploitation and Exploration (BEEx).

The following leadership qualities also affect the Leadership Activitiescomponent 102 of the system 100 in significant ways.

Leadership Quality 1—Cognitive Capacity (CogCap) is a function applieddifferentially to each type of Leadership Activity referenced above ineach situation to account for the individual and collective ability ofindividual leaders and managers to identify, qualify and processOrganization State and Environment State information in formingaspirations, both exploitation aspiration EA and transformingaspirations TA, and to handle the cognitive load associated withunderstanding opportunities for intervention, deciding on a course ofaction, and intervening timely and effectively in a complexorganizational system to establish collective aspirations, alignment andaction plans. CogCap thus represents a dimension of the quality ofleadership in an organization, and in the exemplary embodiment, isunit-less.

Leadership Quality 2—Communication Skill (ComSk) is a function applieddifferentially to each type of Leadership Activity above in eachsituation as leadership activity impacts aspiration gaps, both APvAG andCSvDSG, to account for the individual and collective ability of leadersand managers to assimilate, integrate, synthesize and communicateclearly and effectively the organization's current state in relation toits aspirations, the gaps between them that what is necessary to closethose gaps. Understanding these gaps fosters employee engagement andcommitment and drives action; ComSk thus represents a dimension of thequality of leadership in an organization, and in the preferredembodiment is unit-less.

Leadership Quality 3—Development Capacity (DevCap) is a function applieddifferentially to each type of Leadership Activity above in eachsituation to account for the organization's capacity to develop leadersand put the right individuals with the right skills and experiences inthe right leadership roles. The value of this function impacts thecreation rate for new activities both TLCR and TrLCR and thus the levelsof TLA and TRLA. Ultimately, these levels impact other OrganizationState and Leadership Activities variables, such as: TLEP, IIE, IIEx, IIIand BEEx. Because the individuals selected for leadership roles haveincremental influence on outcomes, this is thus a dimension of thequality of leadership in an organization, and in the preferredembodiment is unit-less.

Leadership Quality 4—Risk Aversion (RskAv) is a function applieddifferentially to each type of Leadership Activity above in eachsituation to account for the individual and collective tendency to avoidor assume risk, to make timely and high quality decisions, and toexecute such decisions with information about the organization and theenvironment so as to match the organization's capabilities with theneeds of the environment. The value of these function impacts the levelof influence leadership activities have on resource allocation rates,including both EAR and ExAR through the functions IIE, IIEx, III andBEEx. Because this impacts tendency and timeliness of action, it thusrepresents a dimension of the quality of leadership in an organization,and in the exemplary embodiment is unit-less.

In sum, the variables for the Leadership Activities component 102include the following: TABLE-US-00002 Transactional Leadership ActivityTLA (L.sup.Transact) Transacting Leadership Creation Rate TLCR(.alpha..sub.Transact) Time Delay to Enact Transacting Leadership TDTLA(.delta..sub.Transact Enact) Transacting Leadership Dissipation RateTLDR (.zeta..sup.Transact) Exploitation Aspirations EA (a.sup.Exploit)Actual Performance Versus Aspiration Gap APvAG (g.sup.Exploit)Transformational Leadership Activity TrLA (L.sup.Transform)Transformational Leadership Creation Rate TrLCR (.alpha..sub.Transform)Time Delay to Enact Transformational TDTrLA (.delta..sub.TransformEnact) Leadership Transformational Leadership Dissipation TrLDR(.zeta..sup.Transform) Rate Transforming Aspirations TA(a.sup.Transform) Current State Versus Desired State Gap CSvDSG(g.sup.Transform) Explore Rents with Reporting Delay ERRD(.delta..sub.Explore) Performance Reporting Delay PRD(.delta..sub.Perform) Cognitive Capacity CogCap (LQ1) CommunicationSkill ComSk (LQ2) Development Capacity DevCap (LQ3) Risk Aversion RskAv(LQ4) Pressure to Perform PTP (.rho..sub.Perform) Pressure to Change PTC(.rho..sub.Change) Transactional Leadership Efficiency Pressure TLEP(l.sup.Transact) Investment in Exploitation BE (i.sup.Exploit)Investment in Exploration IIEx (i.sup.Explore) Investment in InitiativesIII (i.sup.Initiatives) Balance Exploitation and Exploration BEEx(.epsilon.)

Another component of the present system 100 is the Environment Statecomponent 103. The Environment State component 103 includes a series ofvariables that are used to define the state of the organization at eachpoint in time, and over time together with the research instruments,systems and methods used to collect the values of said variables.Variables according to an exemplary embodiment of the present inventionare discussed below.

Using research instruments such as survey instruments, whether bytelephone, Internet, or face-to face; interview protocols, whether bytelephone, Internet, or face-to face; observation and coding techniques,whether by telephone, Internet, or face-to face as well as eithersoftware assisted or manually performed; Internet search engines orother data mining techniques; electronic surveillance techniques whetherof electronic communication, computer, Internet or network usage or ofphysical environments through video or audio equipment, or assumptions,initial values for the variables are established and values for thesevariables over time may be predicted. In the exemplary embodiment, theresearch instruments used were data mining from published case studiesand assumptions made by the researcher. Any of the other techniques, aswell as others included in the context of this invention but not listedcould also have been used in the example case described.

Variables include, but are not limited to: Old Market Carrying Capacity(OMCC) is a variable measuring the level of performance rents availableto all organizations in each existing market, market segment and in theaggregate, assuming the organizations have the capabilities to extractthe rents (e.g., demand). Although markets are used in this discussion,those of ordinary skill in the art will realize that the environment maybe represented as having carrying capacity of any resource of value,such as political influence, religious influence, etc. In the exemplaryembodiment, OMCC is measured in U.S. dollars per time period.Disappearing Old Markets (DOM) is the rate OMCC decreases over time,although a negative value is allowed (implying positive growth in someold markets, market segments or in the aggregate). In the exemplaryembodiment, DOM is measured in U.S. dollars per time period. Old MarketCompetition (OMC) represents the competitive dynamics that characterizethe existing markets. This may be a simple market share calculation, ora separate function or simulation model that simulates the competitiveeffects of markets given the other state variables in the system.

New Market Carrying Capacity (NMCC) is the level of performance rentsavailable to all organizations in each new market, market segment and inthe aggregate, assuming the organizations have the capabilities toextract the rents (e.g., demand). Although markets are used in thisdiscussion, those of ordinary skill in the art will realize that theenvironment may be represented as having carrying capacity of anyresource of value, such as political influence, religious influence,etc. In the preferred embodiment, NMCC is measured in U.S. dollars pertime period. Growth in New Markets (GNM) is the rate at which NMCCincreases over time. In the exemplary embodiment, GNM is measured inU.S. dollars per time period. New Market Competition (NMC) representsthe competitive dynamics that characterize the new markets. This may bea simple market share calculation, or a separate function or simulationmodel that simulates the competitive effects of markets given the otherstate variables in the system.

In sum, the variables for the Environment State component 103 includethe following: TABLE-US-00003 Old Market Carrying Capacity OMCC(M.sup.Old) Disappearing Old Markets DOM (.alpha..sub.Old) Old MarketCompetition OMC (.gamma..sub.Old) New Market Carrying Capacity NMCC(M.sup.New) Growth in New Markets GNM (.alpha..sub.New) New MarketCompetition NMC (.gamma..sub.New)

The above-referenced variables from the Organization State, LeadershipActivities and Environment State components 101-103 may be generated invarious manners. For example, one or more of these variables may bedetermined empirically from data gathering from the organization.Alternately, one or more of these variables may be modeled or simulatedbased on presumed interactions between human beings, and emergentknowledge, relationships and network structures that result. Forexample, an additional computer program may be utilized to simulatehuman interactions within an organization and provide a synthesis forone or more such state variables as its outputs. Such a variablegeneration program may comprise part of the above-described system 100,or may comprise part of a separate system.

Another component of the system 100 is the Simulation Module component105. The Simulation Module component 105 uses a plurality of processingapproaches to manipulate the state variables in the Organization State,Leadership Activities and Environment State components 101-103, tosimulate changes to these state variables over time.

Another component of the system 100 is the Output Reports component 106.The Output Reports component 106 includes the output describing thestate variables of the Organization State, Leadership Activities andEnvironment State components 101-103 over time, their relationships, andtheir values. These reports are based upon the data set created by theSimulation Module component 105. Output Reports display data in avariety of ways, both standard and custom, for the purposes of analysis.Using Output reports, results of experiments can be analyzed andconclusions inferred for the Analysis and Recommendations component 107,or implemented as established protocols.

The final component of the system 100 is the Analysis andRecommendations component 107. The Analysis and Recommendationscomponent 107 is a collection of techniques used to analyze the OutputReports (generated by the Output Reports component 106), and based uponthe data set created by the Simulation Module component 105, and thevalues of the variables from the Organization State, LeadershipActivities and Environment State components 101-103, determineinterventions that might be effectively implemented in the subjectorganization. The Analysis and Recommendations component 107 predictsreal world outcomes which can be expected to be measured in the subjectorganization using the same data gathering techniques, that is, thesurvey, interview and research instruments, systems and methods used tocollect input data for the Organization State, Leadership Activities andEnvironmental State components 101-103. The Analysis and Recommendationcomponent 107 can also provide leadership protocols for implementationas outputs. The Analysis and Recommendation component 107, together withdata gathered from the organization through the survey, interview andresearch instruments, systems and methods used to collect data, can alsobe used modify, through progressive iterations, the relationshipsembodied in the Simulation Module. Thus, results of experiments can beanalyzed and conclusions inferred to continuously improve the SimulationModule's predictive power with respect to the organization it isintended to simulate (whether real or artificial).

FIG. 3 shows a client-server computer system 200 according to anexemplary embodiment of the present invention which may be utilized tocarry out a method according to an exemplary embodiment of the presentinvention. The computer system 200 includes a plurality of servercomputers 212 and a plurality of user computers 225 (clients). Theserver computers 212 and the user computers 225 may be connected by anetwork 216, such as for example, an Intranet or the Internet. The usercomputers 225 may be connected to the network 216 by a dial-up modemconnection, a Local Area Network (LAN), a Wide Area Network (WAN), cablemodem, digital subscriber line (DSL), or other equivalent connectionmeans (whether wired or wireless).

Each user computer 225 preferably includes a video monitor 218 fordisplaying information. Additionally, each user computer 225 preferablyincludes an electronic mail (e-mail) program 219 (e.g., MicrosoftOutlook®) and a browser program 220 (e.g. Microsoft Internet Explorer®,Netscape Navigator®, etc.), as is well known in the art. Each usercomputer may also include various other programs to facilitatecommunications (e.g., Instant Messenger™, NetMeeting™, etc.), as is wellknown in the art.

One or more of the server computers 212 preferably include a programmodule 222 (explained in detail below) which allows the user computers225 to communicate with the server computers and each other over thenetwork 216. The program module 222 may include program code, preferablywritten in Hypertext Mark-up Language (HTML), JAVA™ (Sun Microsystems,Inc.), Active Server Pages (ASP) and/or Extensible Markup Language(XML), which allows the user computers 225 to access the program modulethrough browsers 220 (i.e., by entering a proper Uniform ResourceLocator (URL) address). The exemplary program module 222 also preferablyincludes program code for facilitating a method of simulating leadershipactivity among the user computers 225, as explained in detail below.

At least one of the server computers 212 also includes a database 213for storing information utilized by the program module 222 in order tocarry out the leadership simulation. For example, values for thevariables for the Organization State component 101, LeadershipActivities component 102, and Environment State component 103 may bestored in the database. Although the database 213 is shown as beinginternal to the server in FIG. 3, those of ordinary skill in the artwill realize that the database 213 may alternatively comprise anexternal database. Additionally, although database 213 is shown as asingle database in FIG. 3, those of ordinary skill in the art willrealize that the present computer system may include one or moredatabases coupled to the network 216.

FIG. 4 shows a first portion of a method for implementing a leadershipsimulation 300 which includes a first step 301 of a user enteringorganization data (relating to the Organization State component 101 ofthe system 100) into one of the user computers 225 connected to thenetwork 216. Once entered, the organization data is preferablytransmitted over the network 216 to one or more of the server computers212 where it is stored in one or more databases 213. Next, a user entersenvironment data (relating to the Environment State component 103 of thesystem 100) into one of the user computers 225 connected to the network216 (step 302). Once entered, the environment data is preferablytransmitted over the network 216 to one or more of the server computers212 where it is stored in one or more databases 213. Additionally, auser enters leadership activities data (relating to the LeadershipActivities component 102 of the system 100) into one of the usercomputers 225 connected to the network 216 (step 303). Once entered, theenvironment data is preferably transmitted over the network 216 to oneor more of the server computers 212 where it is stored in one or moredatabases 213. It will be noted by those or ordinary skill in the artthat the particular order in which the organization data, environmentdata and leadership activities data are entered is not material to thepresent invention. In fact, the present invention relates to the entryof portions of each set of data in any order, or any fashion.Alternatively, any one of the above data sets (or all) could be enteredelectronically by a system interface that is coupled to a simulationprogram that generates such inputs, or entered electronically fromsystems used in organizations to support operations and financialreporting.

At step 304, the organization data, environment data and/or leadershipactivities data are organized and stored as a time series matrix. Aswith the entered data, the time series matrix may be stored on theserver computers 212 in the one or more databases 213.

FIG. 5 shows a second portion of a method for implementing a leadershipsimulation 300 which includes a step 305 of a user reviewing the timeseries matrix stored at step 304. If the time series matrix is accurate(step 306), the method proceeds to step 308 where the user assigns aunique scenario name to the time series matrix (e.g., Scenario 1), andselects a specific number of time steps for the simulation. If the timeseries matrix requires amendments or changes, the user is permitted tochange the time series matrix data as appropriate at step 307. If thetime series matrix has been amended at step 307, the user again reviewsthe matrix data at step 306 to determine if it is accurate. Those ofordinary skill in the art will understand that a user may reiteratesteps 305-307 until the time series matrix data is accurate. Once aunique scenario name and number of time steps have been assigned to thetime series matrix at step 308, the method proceeds to step 309 wherethe time series matrix is subjected to the simulation (by the SimulationModule component 105 of the system 100).

FIG. 6 shows a third portion of a method for implementing a leadershipsimulation 300 which includes a step 310 of setting the current timestep for the simulation to zero (0). Next, the current time step isincreased by one (1), at step 311 (e.g., t=1). At this point, the timeseries matrix for the current time step is entered into the simulationprogram (step 312). The simulation program calculates and determinesvarious outputs based on the input time series matrix data, includingbut not limited to, Total Performance Rent Collected (TPRC), ResourcesAvailable to the Firm (RAF), Slack Resources (SRes), ExploitationResources (ER), Exploration Resources (ExR), Current Capabilities forExploitation (CCE), New Capabilities from Exploration (NCEx), Rent FromExploitation (RFCCE), Rent from Exploration (RFNCEx), TransactionalLeadership Activity (TLA), and Transformational Leadership Activity(TrLA) for the current time step (e.g., t=1) (step 313). These outputs(e.g., TPRC, RAF, etc.) are generated and written to a file or filescorresponding to the unique scenario name (e.g., Scenario 1) assigned tothe time series matrix in step 308 (step 314). Next, the current timestep (e.g., t=1) is compared to an end time step, as entered in step 308above (step 315). If the current time step is equal to the end timestep, the simulation is ended at step 316. If the current time step isnot equal to the end time step, the method returns to step 311 where thecurrent time step is increased by one (1) (e.g., from t=1 to t=2).Although the discrete time-step approach to modeling time described isused in the preferred embodiment, other approaches to modeling time,such as considering time as a continuous function, treating timerelativistically, or allowing different models of time within differentvariable interactions and then synchronizing system elements, are alsocontemplated as included in this invention.

FIG. 7 shows steps 320-322 in a process for creating reports from thesimulation results which is part of the method for implementing aleadership simulation 300. The process starts with step 320 where theuser selects particular data sets from a unique scenario or scenariosfor which reports will be prepared (e.g., Scenario 1). For example, auser may select to generate a report on Transactional LeadershipActivity (TLA) in a particular unique scenario (e.g., Scenario 1). Oncethe scenario(s) and data sets have been selected by the user, the datais retrieved at step 321 from the corresponding time series matrixes(stored in the one or more databases 213 of the one or more of theserver computers 212). Finally, reports in a specific format aregenerated and displayed at step 322.

FIG. 8 shows steps 330-334 for displaying reports generated in steps320-322 in various formats (e.g., graphs, tables etc.). This process ispreferably carried out by the Output Reports component 106 of the system100. The process starts with step 330 where a user chooses a particularreport (e.g., on TLA), and a particular display format. The system thenretrieves the information from the corresponding time series matrix(matrices) (step 331), and displays the information in the selectedformat (step 332). As this point, the user may perform various computerfunctions with the report, such as copying, printing, etc., or mayselect additional reports for display (step 333). If the user selects toprint the present report, the report is copied to the selected file, orprinted (step 334). If not, the user is directed to step 330, where anew report may be displayed.

FIG. 9 shows steps 340-346 in a process for analyzing reports from thesimulation results which is part of the method for implementing aleadership simulation 300. This process is preferably carried out by theAnalysis and Recommendations component 107 of the system 100. Theprocess starts with step 340 where the user evaluates the report(s) fora particular scenario (e.g., Scenario 1) to determine if there areunexpected or exceptional outcomes. Then, the user evaluates the inputorganization data input at step 301 (step 341), the environment datainput at step 302 (step 342), and the leadership activities data inputat step 303 (step 343). Those of ordinary skill in the art will realizethat the particular order or fashion in which the organization,environment, and leadership activities data are reviewed are notmaterial. At step 344, the user determines if additional scenarios arenecessary. If so, the proceed proceeds back to step 305 (FIG. 5), wherethe user can review the input data and create new scenarios. If noadditional scenarios are needed, the process proceeds to step 345, wherethe user determines if additional evaluation is needed. If so, theprocess proceeds back to step 340, so that the user can performadditional evaluation. If no additional evaluation is needed, the userproceeds to step 346 where the user determines if an establishedleadership protocol is appropriate for implementation (i.e., whether anestablished leadership practice can be utilized to change the results ofthe organization). If the user agrees that an established protocol canbe implemented, such a protocol (or protocols) are implemented at step347, and the process ends at step 349. If there are no establishedleadership protocols appropriate for the situation, the user may developa new leadership protocol at step 348. Once developed, the protocol isimplemented at step 347 (as above), the process ends at step 349. Thoseof ordinary skill in the art will realize that once these protocols areimplemented, the Organization State, Environmental State and LeadershipActivities may change in the organization, and that these changes, canbe gathered as data and input to the system and method for additionalsimulations.

Although the above-described method 300 is preferably carried out by acomputer system, those of ordinary skill in the art will realize thathuman beings can carry out many of the steps of the method (with orwithout the assistance of a computer), and such actions of human beingsare intended to be within the scope of the present invention.

Next, the mathematical processes performed by the Simulation Modulecomponent 105 will be described. In addition to the method describedbelow, other non-equation-based analytical methods, such as agent-basedor network modeling, expert systems, artificial intelligence or roboticmodeling of individual interactions could also be used, and are intendedto be included in this description. At each time step, Rent From CurrentCapabilities For Exploitation (RFCCE), r.sup.exploit, in dollars perunit of time, and Rent From New Capabilities From Exploration (RFNCEx),r.sup.explore, in dollars per unit of time, are added and integrated toobtain Total Performance Rent Collected (TPRC), R.sup.Collected. Inequation form: R Collected=.intg. 0 t .times. (r Exploit+rExplore).times. .times. d t ##EQU1## An amount, r.sup.gov, calculated asa percentage of R.sup.Collected for each time step, is assumed due togovernmental or other institutions (e.g., taxes). Also, for simplicity,an amount, r.sup.investor, also calculated as a percentage ofR.sup.Collected for each time step, is assumed to be due investors asreturns to capital (ROC) whether to creditors, equity holders or optionholders, paid out as interest, dividends Return on Assets (ROA), Returnon Equity (ROE), etc. The remaining dollars flow at Return Rate (RR),r.sup.Return, to become integrated as Resources Available to the Firm(RAF), R.sup.Available, in equation form and expanding RR: RAvailable=.times. .intg. r Return .times. d t R Available=.times. .intg.0 t .times. [R Collected−(r gov*R Collected)−(r investor*RCollected)].times. .times. d t=.times. .intg. 0 t .times. [(1−r gov−rinvestor)*R Collected].times. .times. d t (0.1) ##EQU2##

Some of the RAF are consumed at a rate, r.sup.ops, in efficientoperations. Resources remaining are either absorbed at rater.sup.Absorbed in Nest Feathering (NF) activities, or flow at Slack Rate(SRa) r.sup.slack to unabsorbed Slack Resources (SRes), R.sup.Slack. Inequation form: R Slack=.intg. 0 t .times. [R Available−(r ops*RAvailable)−(r absorbed*R Available)].times. .times. d t (0.2)=.intg. 0 t.times. [(1−r ops−r absorbed)*R Available] .times. .times. d t .times.(0.3)=.intg. 0 t .times. [(r slack*R Available)].times. .times. d t.times. (0.4) ##EQU3##

To calculate R.sup.Collected more directly, recall that R.sup.Collectedis the integral of the sum of rents, r=r.sup.Exploit+r.sup.Explore,collected from various organizational capabilities interacting withexternal markets. Defining a function, f.sup.rent, as rent appropriationfrom capabilities, C, in markets, M, then results in: R Collected=.intg.0 t .times. r .times. .times. d t=.intg. 0 t .times. f rent .function.(C, M) .times. .times. d t (0.5) ##EQU4## Where M is the market carryingcapacity. In this case for rents associated with Exploitation,R.sub.Exploit.sup.Collected, for each time step, in the exemplaryembodiment we assume for simplicity that the minimum between actualdollars of Old Market Carrying Capacity (OMCC) and the potential dollarsassociated with Current Capabilities for Exploitation (CCE) becomes therent for that time period. In equation form: R Exploit Collected=.intg.0 t .times. r Exploit .times. .times. d t=.intg. 0 t .times. [Min.function. ((1−.gamma.)*M Old, C Exploit)] .times. d t (0.6) ##EQU5##

Where .gamma.=.gamma..sub.Old is the proportion of the market carryingcapacity that goes to Old Market Competition (OMC), M.sup.Old is theOMCC servicing existing capabilities, and C.sup.Exploit is the rentproducing potential of CCE.

Finally, we know that the rate with which CCE, C.sup.Exploit, aredeveloped is determined by a function of the stock level of ExploitationResources (ER), R.sup.Exploit. Thus, a function, f.sup.convert, isdefined characterizing the conversion of resources into capabilitiesover time, such that in general: C=.intg. 0 t .times. f convert.function. (R) .times. .times. d t (0.7) ##EQU6## In this case, for aparticular time step, we assume:C.sub.t=C.sub.t-1+.alpha.R.sub.t-.delta.-.epsilon.C.sub.t−1 (0.8) where.alpha. is the rate of resource conversion to capabilities, .delta. isthe time delay between resource allocation and capabilities development,and .epsilon. is capabilities dissipation rate. When we consider thisequation in the context of Current Capabilities for Exploitation (CCE),the factors become: .alpha..sub.Exploit which is the ExploitationCapabilities Creation Rate (ECCR), the rate of resource conversion tocapabilities, .delta..sub.Exploit is Time Delay for ExploitationCapabilities Development (TDECD), the time delay between resourceallocation and capabilities development, and .epsilon..sub.Exploit isExploitation Capabilities Dissipation Rate (ECDR). When we consider thisequation in the context of New Capabilities for Exploitation (NCE), thefactors become: Exploration Capabilities Creation Rate (ExCCR).alpha..sub.Explore, which is the rate of resource conversion tocapabilities, .delta..sub.Explore is Time Delay for New CapabilitiesDevelopment (TDExCD), the time delay between resource allocation andcapabilities development, and .epsilon..sub.Explore is ExplorationCapabilities Dissipation Rate (ExCDR).

So in general we have: R Exploit Collected=.intg. 0 t .times. f Rent.function. [.intg. 0 t .times. f Convert .function. (R Exploit).times..times. d t, M Old].times. .times. d t (0.9) ##EQU7##

In the exemplary embodiment, it is assumed: R Exploit Collected=.intg. 0t .times. [Min .function. ((1−.gamma. t) .times. M t Old, C t−1+.alpha..times. .times. R t−.delta.−.times. .times. C t−1).times. .times. d t(0.10) ##EQU8## Where M.sup.Old is the OMCC, and whereR.sub.Exploit.sup.Collected is the subset of TPRC, R.sup.Collected,derived from the CCE, including incremental efficiency improvements.

The OMCC in old or current markets is the sum of net exchange rates ofmany market participants interacting. Each participant exchangesresources with the focal firm, and with its competitors, in return fortheir outputs. Thus, OMCC is a measure of the aggregate rate at whichresources, net of cost of creating the outputs, flow from the market tothe firm and its competitors. That is, OMCC is a measure of the economicrent available to the firm in the market.

Assuming that the probability that any given participant in the marketwill leave the market is the same for each participant, the constant,a=a.sub.Old, is called the decay rate (if <0) and growth rate (if >0),and represents the aggregate effect of participants leaving the oldmarkets over time. The differential equation describing decay at aconstant rate over time, t, has the form: d M Old d t=aM Old, a<0 (0.11)##EQU9## Separating terms and rewriting as an integral we have: .intg.(1 M Old).times. .times. d M Old=.intg. a .times. d t (0.12) ##EQU10##Integrating: In M.sup.Old=at+ln M. sub.0.sup.Old (0.13) WhereM.sub.0.sup.Old is the initial value of the market. Exponentiating:M.sup.Old=M.sub.0.sup.Olde.sup.at, a<0, (0.14)

Thus, for forecasting purposes the size of the OMCC addressed by CCE isdefined over time according to an exponential decay curve. In theexemplary embodiment, the value of the parameters may be set todetermine the initial market size, M.sub.0.sup.Old, in dollars per unitof time, and its decay rate, a. From this, the potential rent availableto all competitors at each time step may be calculated. This rentavailable to the focal firm can then be scaled according to a functionOld Market Competition (OMC) .gamma..sub.Old. As a simplifyingassumption in the exemplary embodiment, this analysis assumes the firmhas constant market share.

Beginning with unabsorbed Slack Resources (SRes) available forinvestment, R.sup.Slack, some Exploration Resources (ExR),R.sup.Explore, could be dedicated to exploration at an ExplorationAllocation Rate (ExAR), r.sup.Explore. In the exemplary embodiment,there is no assumption that investment in exploration can be done withborrowed funds, that is, SRes must be available for explorationinvestment to occur, however, this is a simplifying assumption in theexemplary embodiment and is not a requirement nor a limitation for thisinvention. Thus, the inequality for resource allocation to explorationis: R Explore .ltoreq. R Slack−.intg. 0 t .times. r Exploit .times. d t(0.15) ##EQU11## Where r.sup.Exploit is the EAR, and its integral is thetotal resources invested in exploitation.

In the next step, ExR are converted into the New Capabilities FromExploration (NCEx). Unlike the exploitation scenario, however,successful exploration requires significant learning before newcapabilities with potential to capture rents can be created. Thecreation of new capabilities is thus delayed somewhat as learning allowsknowledge about the environment to build up to a level wherein newcapabilities can be developed. This delay is represented by the variableTDExCD (.delta..sub.Explore). This phenomenon has been called‘absorptive capacity,’ and has been shown to imply significant delays incapabilities development. As such, the equation for convertingexploratory resource to capabilities is: C Explore=.intg. 0 t .times. fconvert .function. (R Explore) .times. d t (0.16) ##EQU12## wheref.sup.convert includes the time delay .delta..sub.Explore. Assuming, thesame logic in exploration as exploitation, the equation for TPRC fromboth exploitation and exploration is: R Total=.intg. 0 t .times. f rent.function. (.intg. 0 t .times. f convert .function. (R Exploit).times. dt, M Old).times. d t+.intg. 0 t .times. f rent .function. (.intg. 0 t.times. f convert .function. (R Explore) .times. d t, M New) .times. d t(0.17) ##EQU13## Where M.sup.New is the Carrying Capacity of New Markets(NMCC) to be addressed by exploration. The exploration conversioncomponents of the function f.sup.convert will be discussed after NMCC.

Although other equations can be used to forecast NMCC over time, forillustrative purposes, the NMCC is defined over time as a logistics, orS-curve. This function is characterized by accelerating growth to apoint and then leveling off as the market saturates. It oftencharacterizes infection rates or the substitution of a qualitativelybetter product for another. For the exemplary embodiment, parameters areset that determine the initial market size for the existingcapabilities, its growth rate against the remaining headroom and itsmaximum value. From this the potential rent available to all competitorsat a time step may be calculated. This value can also be scaled by afunction that represents New Market Competition (NMC), .gamma..sub.New.For simplicity, in this analysis constant market shares are assumed.Mathematically, the equation is: M.sub.t.sup.New=m/(1+e.sup.d-at) (0.18)Where M.sup.New is the NMCC, m is the maximum level that the market canreach and d and a=.alpha..sub.New are parameters which determine the“length” of the S-curve. All of these are exogenous parameters that canbe varied in virtual experiments or other forecasting methods.

The level of Transaction Leadership Activity (TLA) is measured on anindex representing the number of leadership activities per unit of time.The exemplary embodiment assumes there is a delay between a change inlevel of TLA, and the impact on Exploitation Aspirations (EA),Exploitation Allocation Rate (EAR) and the Nest Feathering (NF).Although in this invention these delays may be different, the preferredembodiment assumes a single delay and this length of the delay is aparameter, .delta..sub.Transact, in the model that can be varied. Inaddition, there is a typical management reporting cycle delay,.delta..sub.Perform, for example, three (3) months for financialresults, impacts the timing of information about the organization'sperformance available to inform leadership activities.

Post delay, based upon the level of TLA, L.sup.Transact, the firm's EA,a.sup.Exploit, is set (or reset). In addition to the level of leadershipactivity, signals from the environment, such as, perceived existingmarket carrying capacity and competitive dynamics, as well as, internalperceptions about the firm's CCE, C.sup.Exploit, are used to setperformance aspirations. The EA, that is, the organization's rentproducing goal over time, a.sup.Exploit, is in dollars per unit of time.It represents the expectations of the organization for rent from CCE inthe preferred embodiment. If the parameter called Pressure to Perform(PTP) or .rho..sub.Perform is greater than a particular threshold value,then the perceived addressable market is assumed to be the driver ofaspirations, and the formula is as follows:a.sub.t.sup.Exploit={circumflex over (M)}.sub.t.sup.Old (0.19) Where{circumflex over (M)}.sup.Old is an interpreted view of addressablemarket size after competitors take their share. This internal assessmentof the market is based upon the interpretation of information returnedto the system. Thus, this function is likely to be quite complex. Forsimplicity, the effects of this interpretation process are representedin the exemplary embodiment as the actual market size, less market sharelost to competition, times an exploitation collective cognition factor(CogCap) LQ1. This simplification is intended to approximate the processof aspirations setting.

If PTP (.rho..sub.Perform) does not meet the threshold value then, is afunction that EA depends upon softer internal metrics, such as,maintaining current performance and, as a function the level of TLA, thepartial closure of any perceived gap. For the exemplary embodiment, theformula used is: a. sub.t.sup.Exploit=r.sub.t-.delta..sup.Exploit+L.sup.Transact*({circumfl-ex over(M)}.sub.t.sup.Old-r.sub.t-.delta..sup.Exploit) (0.20) WhereL.sup.Transact is the level of TLA, and r.sub.t-.delta..sup.Exploit isreported performance (i.e., RFCCE) after Performance Reporting Delay(PRD), .delta..sub.Perform. Although not shown, in the exemplaryembodiment, this value is again moderated by the function CogCap (LQ1).

Once EA, a.sup.Exploit, is set, the perceived and Actual PerformanceVersus Aspiration Gap (APvAG), g.sup.Exploit, based upon theseaspirations, is subject to two (2) distinct delays, both of which canalso introduce errors. These are (1) aspirations must be codified intoprograms and these must be enacted, communicated and executed, and (2)information regarding actual performance rents collected are subject toreporting delays. This internal assessment of the gap is based upon theinterpretation of information returned to the system. Thus, thisfunction is likely to be quite complex. For simplicity, the effects ofthis interpretation process are represented in the exemplary embodimentas a factor that measures Communications Skill (ComSk) LQ2, thatmoderates the understanding of the gap. This simplification is intendedto approximate the process of communications and alignment.

When these delays are considered, reported actual rents are comparedwith aspirations to determine the gap, if any that exists. The level ofTransactional Leadership Activity, L.sup.Transact, once again moderatesthe timing and effectiveness of the enactment process. Thus, theequation is:g.sub.t.sup.Exploit=L.sub.t.sup.Transact*(a.sub.t-.delta..sub.enact.sup.E-xploit-r.sub.t-.delta..sub.report.sup.Exploit)(0.21) Where g is the APvAG, L the level of TLA, a is the aspirationlevel and r is the rate performance rents are actually achieved in theenvironment. The delays, .delta. relate to the time it takes to enactaspirations, .delta..sup.Enact=.delta..sub.Transact, and reportperformance, .delta..sup.Report=.delta..sub.Perform, respectively. Thesedelays in the process are a critical aspect of the system dynamics.

To complete the loop, a perceived gap (APvAG), g.sup.Exploit, increasesthe level of TLA. The gap, g.sup.Exploit, positively relates to thelevel of TLA, with a greater gap increasing TLA, but only to a point.This internal process of converting a recognized gap into leadershipactivity is based upon the interpretation of information returned to thesystem and the availability of skilled leaders in the right jobs. Thus,this function is likely to be quite complex. For simplicity, the effectsof this interpretation and leadership development process arerepresented in the exemplary embodiment as a function that measuresleadership development capacity, Development Capacity (DevCap) LQ3, thatmoderates the creation of Leadership Activity. This simplification isintended to approximate the process of leadership development. Withoutthe LQ3 function (which would serve to moderate L.sup.Transact), in theexemplary embodiment, the equation is as follows:L.sub.t.sup.Transact=L.sub.t−1.sup.Transact+g.sub.t−1.sup.Exploit*(1−L.su-b.t−1.sup.Transact)-.xi..sup.Transact*L.sub.t−1.sup.Transact(0.22) Where, .xi..sup.Transact, refers to the rate at which the levelof leadership activities, in this case transactional, declines in theorganization if it is not reinforced, referred to above as TransactingLeadership Dissipation Rate (TLDR).

Once EA, a.sup.Exploit, are set, enacting for the organization the APvAG(gap), g.sup.Exploit, introduces a time delay.delta..sub.Transact.Programs must be communicated and executed and information must flowthrough the organization to its members. Actual rents collected arecompared with aspirations, but a reporting delay, .delta..sub.Perform,must be managed. However, a low level of TLA, L.sup.Transact, adds errorinto the implementation by understating the APvVAG in resourceallocation decisions. The APvVAG (gap), g.sup.Transact, influences thelevel of Investment in Exploitation (IIE) and eventually EAR,r.sup.Exploit, versus other alternatives. The size of the perceived gapbetween the desired and current states of the organization drives thecreation of TLA and routines.

The level of TLA is assumed to impact the dynamics of the organizationalsystem by biasing it toward exploitation in two ways. (1) The level ofTLA impacts the level of pressure placed on the organization to reducethe Nest Feathering (NF), r.sup.Absorbed, and thus increase the slackrate SRa, r.sup.Slack, and thus the level of slack resources, SRes, orR.sup.Slack, available to the firm, and (2) the level of TLA impacts theExploitation Allocation Rate (EAR), r.sup.Exploit, and thus the level ofexploitation resources (ER), R.sup.Exploit, available to create CurrentCapabilities for Exploitation (CCE), C.sup.Exploit.

A time delay is involved as the level of Transformational LeadershipActivity (TrLA) builds. The intensity level impacts both the developmentof Transforming Aspirations (TA) and the Current State Versus DesiredState Gap (CSvDSG), and thus, Investment in Exploration (IIEx),Investment in Initiatives (III) and ultimately the ExplorationAllocation Rate (ExAR). The length of delay, .delta..sup.Transform, is aparameter that can be adjusted, but twelve (12) to twenty-four (24)months, would not be surprising, and even five (5) to ten (10) yearsmight be required for significant transformation. In addition, in theexemplary embodiment, if the parameter called Pressure to Change (PTC)or .rho..sub.Change is greater than a particular threshold value, thenthe perceived addressable new market is assumed to be the driver ofaspirations TA, that is, a new market is recognized and the need forchange is assumed.

Post delay associated with exploration and new capabilities reporting(e.g., ExRD) .delta..sub.Adapt, TA are set (or reset) based upon signalsfrom the environment represented by Environmental State variables; theseare moderated by (1) a Collective Cognitive function (CogCap)LQ1=c.sup.Transform that interprets the signals, and (2) the level ofTrLA, as described above. Signals from the environment, that isEnvironmental State variables that are used by the function, include thegrowth and competitive characteristics of New Market Carrying Capacity(NMCC).

The clarity of this signal is distorted for internal consumption by theExploration Collective Cognitive Capacity factor (CogCap),LQ1=c.sup.Transform, that introduces error into the interpretation.Also, the level of the TrLA impacts the level of aspirations. Together,these limit the accuracy of predictions associated with TA.

In the exemplary embodiment, TA, a.sup.Transform, are in dollars perunit of time and represent expectations for Rent From New Capabilitiesfrom Exploration (NCEx). These aspirations (TA) depend upon theperceived market size, NMCC, and in the case of transformation, thelevel of TrLA. The formula is as follows:a.sub.t.sup.Transform=L.sup.Transform*{circumflex over(M)}.sub.t.sup.New, (0.23) where {circumflex over (M)}.sup.New is anoisy view of new market size (i.e., NMCC) that includes the effects offunction CogCap (LQ1).

One approach to determining {circumflex over (M)}.sup.New would be toassume the organization estimates new market size by determining theparameters of a logistics or “S-Curve” without regard for the currentmarket size. That is, the organization bases its decisions from some“analysts' projections”. In this case the function could be modeled,such that {circumflex over(M)}.sub.t.sup.New=c.sup.Transformm/(1+e.sup.d-(c.sup.Transform*.sup.at))(0.24) where {circumflex over (M)}.sup.New is the perceived NMCCfunction over time, and where m is the maximum level that the market isforecasted to reach at saturation and d and a are parameters whichdetermine the “length” of the S-curve. The factor c.sup.Transformrepresents the LQ1 function and is a parameter representing the randomerror introduced by a particular organization's collective cognition(CogCap) as it interprets these market signals. This error approacheszero and c.sup.Transform approaches 1.

All of the above are parameters that can be varied in virtualexperiments. In this exemplary embodiment, a simple function is definedwhere the size of the new markets is assumed to be equal to the currentsize of the new market less the share gained by competitors, andmultiplied by a collective cognition factor, c.sup.Transform, that is:{circumflex over(M)}.sub.t.sup.New=c.sup.Transform*M.sub.t.sup.New*(1−M.sub.t.supCompeti-tors)(0.25) Where M.sub.t.sup.Competitors=.gamma..sub.New is the portion ofthe market ceded to competition (e.g., New Market Competition (NMC)).

As described above, Exploration Resources (ExR) are used by theorganization to build new capabilities over time. Thus, the value of newcapabilities, in terms of dollars of potential, is a function of ExR.Once created, these new capabilities are presented to the marketplaceand depending in the carrying capacity of the new markets they address(NMCC), find new opportunities and their match to market needs rents arecollected for these new capabilities at the rate, r.sup.Explore.

After a reporting delay, .delta..sub.Adapt, newly collected Rent FromNew Capabilities from Exploration (RFNCEx) are compared with theorganization's TA to refresh the CSvDSG (gap) enacted by TrLA. The levelof this activity determines what new aspirations are established, andthus whether the gap persists. The higher the level of TrLA, the higherthe bar is raised as success is achieved. This effect is moderated by afunction representing Communication Skills, (ComSk), LQ2, which mayreduce the perceived gap regardless of the actual gap. Thus, with littleTrLA the TA is not increased to reset aspirations, and gap closure actsas a balancing feedback loop and as the gap closes reduces the level ofexploration. The time delays associated with these various steps arecritical here. Although simplified in the exemplary embodiment, othermore comprehensive functions are meant to be included in the invention.

Once TA, a.sup.Transform, are set, enacting TrLA to define for theorganization the gap CSvDSG, g.sup.Transform, which includes programs toclose the gap, introduces a time delay, .delta..sub.Transform. Programsmust be communicated and executed and information must flow through theorganization to its members. Actual rents collected are compared withaspirations, but an reporting delay must be managed. However, a lowlevel of TrLA, L.sup.Transform, adds error into the implementation byunderstating the CSvDSG in resource allocation decisions. The CSvDSG(gap), g.sup.Transform, influences the level of ExAR, r.sup.Explore asdescribed below, versus other alternatives. After time delays forreporting and enacting aspirations, the equation used in the exemplaryembodiment is:g.sub.t.sup.Transform=L.sup.Transform*(a.sub.t-.delta..sub.enact.sup.Tran-sform-r.sub.t-.delta..sub.report.sup.Explore)(0.26) Where g is the CSvDSG (gap), L the level of TrLA, a is theaspiration level r is the rate performance rents are extracted from theenvironment, and .delta.'s represents enactment,[.delta..sup.Enact=.delta..sub.Transform] and reporting delays,[.delta..sup.Report=.delta..sub.Adapt], respectively. This internalassessment is based upon the interpretation of information returned tothe system. Thus, this function is likely to be quite complex. Forsimplicity, the effects of this interpretation process are representedin the exemplary embodiment as a factor that measures CommunicationsSkill (ComSk) LQ2, that moderates the understanding of the gap by theorganization's members. This simplification is intended to approximatethe process of communications and alignment.

As in the case of TLA, the size of the perceived gap between the desiredand current states of the organization drives the creation of TrLA androutines. The greater the perceived gap, the more the vacuum for TrLA isfilled by ambitious actors. This internal process of converting arecognized gap into leadership activity is based upon the interpretationof information returned to the system and the availability of skilledleaders in the right jobs. Thus, this function is likely to be quitecomplex. For simplicity, the effects of this interpretation andleadership development process are represented in the exemplaryembodiment as a function that measures leadership Development Capacity(DevCap) LQ3, that moderates the creation of Leadership Activity. Thissimplification is intended to approximate the process of leadershipdevelopment. For simplicity, ignoring the LQ3 function that moderatesthis process, the equation is: L t Transform=L t−1 Transform+g t−.delta.enact Transform a t−.delta. enact Transform*(1−L t−.delta. enactTransform)−.xi. Transact*L t−1 Transform (0.27) ##EQU14## The level ofTrLA is assumed to impact the dynamics of the organizational system bybiasing it toward exploration. This occurs through two channels, (1)continuous investment in exploration (through programs such as, but notlimited to, R&D and other learning programs), and (2) through focusedinvestment in strategic initiatives intended to build new capabilities.This internal process of converting leadership activity into investmentin exploration and innovation initiatives is based upon theinterpretation of information returned to the system and theavailability of skilled leaders in the right jobs. Thus, this functionis likely to be quite complex. For simplicity, the effects of thisinterpretation balancing investment and risk are represented in theexemplary embodiment as a factor that measures decision quality andexecution proficiency. This highly complex, collective decision makingprocess is summarized in the preferred embodiment as a function calledRisk Aversion (RskAv) LQ4, that moderates the allocation of resources toexploration and new capabilities development. This simplification isintended to approximate the process of decision-making and execution inthe resource allocation and implementation processes.

Investment in non-specific exploration has the characteristics of realoptions whereby the idea is to invest just enough to “keep the optionopen.” Investment in strategic initiatives is more like investment inassets or capital and likely to be judged with standard business casesand discounted cash flows. Both of these investment types are seen asbiasing the system toward an increased ExAR, r.sup.Explore. Ignoring theRskAv function which is assumed in the exemplary embodiment to be afactor reducing the value of r.sup.Explore, the equation is:r.sup.Explore=L.sub.t-.delta..sup.Transform*i.sup.R&D+i.sup.initiatives(0.28) where i.sup.R&D=i.sup.Explore is the exploration factor,Investment in Exploration (IIEx), and i.sup.Initiatives representsinvestments in focused initiatives to build new capabilities, Investmentin Initiatives (III). In the exemplary embodiment, the factori.sup.initiatives is assumed to equal a particular value, the standardintervention, but only if TrLA is above a certain threshold level andthere are adequate Slack Resources (SRes) to enable investment,otherwise the investment is zero (0). Finally, there exists a functionthat is represented by the variable Balance Exploitation and Exploration(BEEx), .epsilon., that describes the mutual impact of any interactionbetween TLA and TrLA, such that: TrLA=f(TLA, .epsilon.).

Having described the process wherein transformational leadershipactivities arise, and then bias the resource allocation in the systemtoward exploration, the system description is complete. Bothtransactional and transformational leadership activities (TLA, TrLA)arise from the dynamics of the system, are measured by definedvariables, and if each is reinforced by internal system processes (whichrespond to information signals from the environment), each operates tobias the manner in which system responds to the environment, eitherthrough increased focus on exploitation and performance or explorationand adaptation, or both. These effects are seen in the variables thatdefine the Organization State, the Environment State and LeadershipActivities.

Although the invention has been described in terms of exemplaryembodiments, it is not limited thereto. Rather, the appended claimsshould be construed broadly to include other variants and embodiments ofthe invention which may be made by those skilled in the art withoutdeparting from the scope and range of equivalents of the invention.

What is claimed is:
 1. A system, comprising: a memory that storesinstructions; and a processor that executes the instructions to performoperations, the operations comprising: extracting, from computer andnetwork usage data obtained by utilizing an electronic surveillancetechnique or from data obtained from an electronic survey instrument,data on a leadership activities variable so as to establish an initialvalue of the leadership activities variable, wherein the computer andnetwork usage data is obtained utilizing the electronic surveillancetechnique by utilizing electronic surveillance equipment including videoequipment, wherein the leadership activities variable is simulated basedon a network structure associated with an organization, wherein theleadership activities variable is a multi-dimensional leadershipactivities variable; determining, after the extracting, representationsof levels of different types of leadership activities within theorganization for the leadership activities variable based on aggregatingthe computer and network usage data and additional data obtained on theleadership activities variable; calculating, by utilizing a computersimulation program of the system that executes within a hardware-basedsimulation module component, a predicted performance of the organizationbased on an organization state variable, the leadership activitiesvariable, and a changing level of leadership activity of theorganization, wherein the organization state variable is amulti-dimensional organization state variable; determining, by utilizingthe computer simulation program of the system and based on thecalculated predicted performance, an action that is predicted to changethe leadership activities variable if it is executed by the processorand thus also be expected to adjust the calculated predictedperformance; providing, to a browser program of a computercommunicatively linked to the system, an output report and arecommendation indicating specific leadership activities and protocolsto be increased or decreased for the organization and a forecastedoutcome expected from performing the action based on the recommendation;adjusting, by utilizing the computer simulation program and by utilizingthe output report and the recommendation, the action to be executed toadjust the performance of the organization as the computer and networkusage data and additional data on the leadership activities variable anddata on the organization state variable change over time; andsimulating, in the computer simulation program and based on an inputreceived from the computer, the action to be executed to adjust theperformance of the organization so as to simulate an impact of theaction on the organization, wherein the simulating is performed byutilizing a time series matrix including the multi-dimensionalleadership activities variable and the multi-dimensional organizationstate variable.
 2. The system of claim 1, wherein the operations furthercomprise providing the output report and the recommendation on aperiodic basis as further data is gathered and processed.
 3. The systemof claim 1, wherein the operations further comprise obtaining the dataon the organization state variable by utilizing the electronic surveyinstrument.
 4. The system of claim 1, wherein the operations furthercomprise obtaining the computer and network usage data for theleadership activities variable by utilizing a telephone, an internet, anelectronic communication, or a combination thereof.
 5. The system ofclaim 1, wherein the operations further comprise implementing aleadership simulation generated by the computer simulation program for acomputerized agent.
 6. The system of claim 1, wherein the operationsfurther comprise calculating the predicted performance of theorganization based on an environmental state variable.
 7. The system ofclaim 1, wherein the operations further comprise forecasting the levelsof the different types of leadership activities.
 8. The system of claim1, wherein the operations further comprise obtaining data on anenvironmental state variable by utilizing the electronic surveillanceequipment.
 9. The system of claim 1, wherein the operations furthercomprise adjusting a computer simulation associated with the action tobe executed as the computer and network usage data and additional dataon the leadership activities variable and data on the organization statevariable change over time.
 10. A method, comprising: extracting, fromcomputer and network usage data obtained by utilizing an electronicsurveillance technique or from data obtained from an electronic surveyinstrument, data on a leadership activities variable so as to establishan initial value of the leadership activities variable, wherein thecomputer and network usage data is obtained utilizing the electronicsurveillance technique by utilizing electronic surveillance equipmentincluding video equipment, wherein the leadership activities variable issimulated based on a network structure associated with an organization,wherein the leadership activities variable is a multi-dimensionalleadership activities variable; determining, after the extracting and byutilizing instructions from a memory that are executed by a processor,representations of levels of different types of leadership activitieswithin the organization for the leadership activities variable based onaggregating the computer and network usage data and additional dataobtained on the leadership activities variable; calculating, byutilizing a computer simulation program of the system that executeswithin a hardware-based simulation module component, a predictedperformance of the organization based on an organization state variable,the leadership activities variable, and a changing level of leadershipactivity of the organization, wherein the organization state variable isa multi-dimensional organization state variable; determining, byutilizing the computer simulation program of the system and based on thecalculated predicted performance, an action that is predicted to changethe leadership activities variable if it is executed by the processorand thus also be expected to adjust the calculated predictedperformance; providing, to a browser program of a computercommunicatively linked to the system, an output report and arecommendation indicating specific leadership activities and protocolsto be increased or decreased for the organization and a forecastedoutcome expected from performing the action based on the recommendation;adjusting, by utilizing the computer simulation program and by utilizingthe output report and the recommendation, the action to be executed toadjust the performance of the organization as the computer and networkusage data and additional data on the leadership activities variable anddata on the organization state variable change over time; andsimulating, in the computer simulation program and based on an inputreceived from the computer, the action to be executed to adjust theperformance of the organization so as to simulate an impact of theaction on the organization, wherein the simulating is performed byutilizing a time series matrix including the multi-dimensionalleadership activities variable and the multi-dimensional organizationstate variable.
 11. The method of claim 10, further comprising providingthe output report and the recommendation on a periodic basis as furtherdata is gathered and processed.
 12. The method of claim 10, furthercomprising obtaining the data on the organization state variable byutilizing the electronic survey instrument.
 13. The method of claim 10,further comprising obtaining the computer and network usage data for theleadership activities variable by utilizing a telephone, an internet, anelectronic communication, or a combination thereof.
 14. The method ofclaim 10, further comprising implementing a leadership simulationgenerated by the computer simulation program for a computerized agent.15. The method of claim 10, further comprising adjusting a computersimulation associated with the action to be executed as the computer andnetwork usage data and additional data on the leadership activitiesvariable and data on the organization state variable change over time.16. The method of claim 10, further comprising calculating the predictedperformance of the organization based on an environmental statevariable.
 17. The method of claim 10, further comprising forecasting thelevels of the different types of leadership activities.
 18. Anon-transitory computer-readable medium comprising instructions, whichwhen loaded and executed by a processor, cause the processor to performoperations, the operations comprising: extracting, from computer andnetwork usage data obtained by utilizing an electronic surveillancetechnique or from data obtained from an electronic survey instrument,data on a leadership activities variable so as to establish an initialvalue of the leadership activities variable, wherein the computer andnetwork usage data is obtained utilizing the electronic surveillancetechnique by utilizing electronic surveillance equipment including videoequipment, wherein the leadership activities variable is simulated basedon a network structure associated with an organization, wherein theleadership activities variable is a multi-dimensional leadershipactivities variable; determining, after the extracting, representationsof levels of different types of leadership activities within theorganization for the leadership activities variable based on aggregatingthe computer and network usage data and additional data obtained on theleadership activities variable; calculating, by utilizing a computersimulation program of the system that executes within a hardware-basedsimulation module component, a predicted performance of the organizationbased on an organization state variable, the leadership activitiesvariable, and a changing level of leadership activity of theorganization, wherein the organization state variable is amulti-dimensional organization state variable; determining, by utilizingthe computer simulation program of the system and based on thecalculated predicted performance, an action that is predicted to changethe leadership activities variable if it is executed by the processorand thus also be expected to adjust the calculated predictedperformance; providing, to a browser program of a computercommunicatively linked to the system, an output report and arecommendation indicating specific leadership activities and protocolsto be increased or decreased for the organization and a forecastedoutcome expected from performing the action based on the recommendation;adjusting, by utilizing the computer simulation program and by utilizingthe output report and the recommendation, the action to be executed toadjust the performance of the organization as the computer and networkusage data and additional data on the leadership activities variable anddata on the organization state variable change over time; andsimulating, in the computer simulation program and based on an inputreceived from the computer, the action to be executed to adjust theperformance of the organization so as to simulate an impact of theaction on the organization, wherein the simulating is performed byutilizing a time series matrix including the multi-dimensionalleadership activities variable and the multi-dimensional organizationstate variable.
 19. The non-transitory computer-readable medium of claim18, wherein the operations further comprise adjusting a computersimulation associated with the action to be executed as the computer andnetwork usage data and additional data on the leadership activitiesvariable and data on the organization state variable change over time.20. The non-transitory computer-readable medium of claim 18, wherein theoperations further comprise implementing a leadership simulationgenerated by the computer simulation program for a computerized agent.